Nepotism and J.P. Morgan is still a hot topic on the Internet.
In a great article in Bloomberg, entitled “What’s the Difference Between U.S., Chinese Corruption?”, writer Jonathan Weil brings up many of the contradictions in the idea of criminalizing nepotism that I mention in “FCPA, JP Morgan vs. The Privileges of Government.”
But he goes much further”
“In the U.S., companies hire power people’s children all the time for reasons beyond their obvious skill set. (Chelsea Clinton at a hedge fund?) And they don’t just bother with the kids – they hire the power people themselves. (Do you think Larry Summers got a high paying job at the hedge fund D.E. Shaw because of his skills as a trader?)
If the feds are going to target wheel-greasing in China – where it can be difficult to get business done without bribing somebody – does this mean we need a Domestic Corrupt Practices Act, too. In Colorado, JP Morgan used to employ Chris Romer as a banker. His father, Roy Romer, was the stat’s governor for 13 years. Did that help Chris Romer get hired? It couldn’t have hurt. Do we need a law against this? Of course not.”
While I appreciate his parting observation that “Life isn’t fair”, leaving the issue unaddressed, with all of its contradictions in place is not really a solution either. I discussed this some in Favoritism and the Alien.
Certainly, not all of life’s injustices can, or should be addressed with criminal laws.
Apart from the JP Morgan investigation itself, its still worth recognizing that we should take a closer look at the law and policy dealing with nepotism and the attendant conflicts of interest to develop an approach that makes more sense.
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